Applebee's Kiosk Tip Calculation Sparks Controversy Over After-Tax Gratuity

Key points

• A customer shared a TikTok video questioning Applebee's suggested tip of $11.30 on a $49.49 bill, noting that 20% of the subtotal is $9.90.
• The kiosk calculates suggested tips on the after-tax total of $56.50, rather than the pre-tax subtotal, leading to a higher gratuity amount.
• Robert Mahon, managing partner of Mahon Hospitality Group, stated that restaurants can adjust their payment system settings to calculate tips before tax.
• Mahon argued that tips should be based on pre-tax amounts and emphasized the importance of transparency in how suggested gratuities are calculated.
• Fox News Digital reached out to Applebee's for comment regarding the incident.

Background

This incident follows a similar controversy at Dave & Buster's, where customers questioned suggested gratuities calculated on after-tax totals. The debate over tipping practices and transparency in restaurant payment systems has gained attention, with industry experts advocating for clearer disclosure of how suggested tips are calculated.

Why it matters

The incident highlights the importance of transparency in restaurant tipping practices and the potential for confusion when suggested gratuities are calculated on after-tax totals. It underscores the need for clear disclosure and the ability for restaurants to adjust their payment system settings to ensure fair and understandable tipping practices for customers.

What to watch

Applebee's may review and adjust its payment system settings to calculate suggested tips on pre-tax amounts, in line with industry best practices. Customers are encouraged to check the basis of suggested gratuities before paying to avoid unexpected charges.